Large fare reductions

British Airways today announced that it will be reducing many of its fares from April 1 2001. The airline is adjusting its fares to reflect the changes in payments to agents, following the introduction of its new agents’ remuneration scheme.

Following extensive consultation with travel agents and trade bodies, British Airways is to introduce a fundamental change to the way it works with UK travel agents from April 1 2001. The current percentage commission payment will be replaced by a fairer and clearer structure.

British Airways will pay agents for the basic service of making a booking, issuing travel documents and collecting the fare. The new scheme more accurately reflects the cost incurred by the agent. Previously commission on lower fares was insufficient to cover the work involved and was cross-subsidised by commission on higher fares.

From April 1 2001, all fares sold in the UK except the multi-carrier fares, will be adjusted by the difference between the current percentage commission paid to agents and the new booking payments.

This will mean that all First Class and Club World customers will pay less for their British Airways’ fares and many other customers will also pay less. Based on today’s fares, return First Class fares will drop by up to £516, Club World fares will be reduced by up to £376 and long haul economy fares will be cut by up to £110. Some lower fares will increase by an average of £2 , since the new booking payments will be higher on these fares than the previous percentage commission.

Discounts of up to £5 per ticket will be introduced for on-line e-ticket bookings on www.britishairways.com. This reflects the lower costs in making these bookings and is consistent with on-line incentives already offered by some agents.

Tiffany Hall, British Airways Head of UK & Ireland Sales said: "We have been able to hand back significant savings to our customers on long haul and business fares as we are paying less commission on higher fares. Although some of the lower fares are going up, the increases are very small.

"The new more transparent scheme means that the customer can choose the level of service they require from the agent and know exactly what they are paying for. Over time this will encourage process efficiencies, drive down distribution costs and lead to a better deal for the customer.

"It also makes it clearer what we pay agents for and what customers pay agents for directly. We will pay agents for the basic service of making a booking, issuing travel documents and collecting the fare. Many customers want a range of additional services offered by agents - including British Airways Travel Shops - such as itinerary planning, out of hours services and dedicated service desks, for which they are likely to be charged a service fee."